This might be “Old Business” to many online investors.  However, I think that it might be informative to make a detailed comparison of the three popular TYPES of investment plans that are now offered by online HYIPs.  I’m going to do this by comparing three imaginary investment plans.  All of them have the SAME length as well as the SAME average daily net interest rate (DNI).  As you probably realize by now, DNI might be the best indicator of the profitability (and risk) of an investment plan.

So, the first question in your mind, as we begin, should be, “If all of the three investment plans have the same DNI and are, therefore, equally profitable, how can one plan be better than the other?”  This is a good question.  We’ll begin by taking a look at the three plans in our examples and calculating the DNI for each of them.  Here are the plans:

1.  “Principal Included” Plan.  5% daily for 25 days.  In this plan, if you multiply 5% by 25 days, you come up with a total GROSS interest of 125%.  Subtracting 100% from it because it includes your investment, you get a total NET interest of 25%.  Finally, dividing this by the 25-day length of the plan, you get an average daily net interest (DNI) of 1%.  You can also see that, since you are recovering 5% of your investment per day, you will have recovered 100% of it (broken even) after 20 days.  So, for the last five days of the plan you are earning “pure profit.”

2.  “Principal Back” Plan.  1% daily for 25 days with investment returned at end of the plan.  In this plan, if you multiply 1% by 25 days, you come up with a 25% return by the end of the plan.  So, you will not have broken even before the plan ends.  You will only break even when your investment is returned to you at the end of the plan.  After you receive your investment back, you can regard your daily return as your profit, or DNI.  So, the DNI for this plan is also 1%.

3.  “After” Plan.  125% after 25 days.  This is a one-shot return at the end of the investment plan.  Since it includes your investment, it is your total GROSS interest and your total NET interest will be 100% less than this or 25%.  Like in Case #1, is you average this out over the 25-day length of the plan, you again come up with a DNI of 1%.

So, we have three investment plans that are all 25 days long and that all have the same DNI.  So, they are all equally profitable and, from the point of view that high (or low) profit goes along with high (or low) risk, they are all equally profitable or risky.  Obviously, there is a lot more to the story and it all boils down to WHEN you receive your return from an investment plan.  The quick answer is that, the sooner you receive your returns, the better.  We all know that investment in HYIPs is always a risky idea — simply because a program might close — unannounced — at any time.  So, the faster you can get your earnings out of an HYIP, the better.  And, the type of investment plan that enables you to do this is the best one.

Well, I’m sure you know where this is going.  However, to complete the story and to emphasize my point, let’s go through the details — beginning with the WORST type of investment plan first.

Case #3, the “After” Plan is clearly the worst type of plan because you don’t receive any return at all until the end of the investment plan.  So, both your initial investment and your interest are at risk for the entire duration of the plan.  This type of investment plan might be acceptable if it is very short term, say, only a week or so long.  However, for long term plans, it is extremely risky.  Often a program will promise a spectacular return at the end of such an investment long-term plan.  Don’t be tricked.  You will probably not receive it.

Case #2, the “Principal Back” Plan is an improvement over the “After” Plan because at least some of your investment is recovered before the end of the plan.  In some investment plans of this type that I’ve seen, your entire investment is recovered.  However, in either case, at least your initial investment is at risk until the end of the investment plan.  If you analyze investment plans of this type, you will likely find that their DNIs are on the high side — a sort of acknowledgement that the program is asking the investor to put money into a plan that is risker than most.

Case #1, the “Principal Included” plan is, by far, the BEST type of investment plan.  In this case, you recover your investment at a significant rate from the first day of the plan such that you break even well before the plan ends.  In our example above, with a return of 5% per day, you will recover half of your investment in 10 days and a quarter of it in only five days. 

So, in conclusion, although investment plans might be of the same length and have the same DNI, they can be as different as night and day with respect to their level of risk.  Our recommendation is that, generally speaking, the investor should avoid “After” plans and aim at “Principal Included” plans.  “Principal Back” plans should also be regarded with caution.

I hope this information is helpful. 

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